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Early Analysis Shows Flat to Decreasing Heath Care Utilization and Spending During the Coronavirus Crisis

At the start of the pandemic, estimates about the impact of the COVID-19 public health emergency, and related economic crisis, on health care spending diverged widely. Some experts predicted increased health care costs due to the expense of treating patients with the novel disease, while others anticipated reduced spending as a result of lockdowns and the deferral of non-emergent procedures and treatments. This week, the Kaiser Family Foundation’s Health Systems Tracker released a chart summarizing some of the data available so far this year.

Overall, the results show that there may be a drop in health care spending for 2020 as compared to 2019—which is unusual. Health care spending generally increases year over year, most often at a rate above inflation. But the decrease may not hold. The most recent data—for October—shows only a slight decrease in spending, and increased COVID-19 hospitalizations since October may erase the difference caused by the dramatic dip in spending in March and April entirely.

The report also breaks down the changes in spending and utilization by setting type, showing that decreases in outpatient settings like doctors’ offices are offset by increases in hospital and nursing home spending. Increases in telemedicine have been significant but have not fully compensated for the drop off in office visits. 

This early analysis is helpful for understanding and addressing the potential long-term consequences of the pandemic on our health care infrastructure, to direct relief to those sectors of the industry that are most economically impacted, and to aid our coverage programs like Medicare and Medicaid in preparing for future emergencies.

This report includes information about Medicare spending but does not break out the changes by type of insurance. As we get more information and study how the pandemic has disproportionately impacted certain populations, an examination of Medicare spending specifically may prove useful.

Read the analysis.

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